April 5, 2006

 

China corn prices slightly lower, farmers keen to sell

 

 

Corn prices in China's major producing regions were slightly lower in the week to Wednesday (Apr 5), pressured by increasing sales from farmers ahead of spring plowing, said analysts.

 

"Farmers are keen to sell as much as they can before they have to devote full time to their farm work," said Wang Shiliang, an analyst with Jilin Grains Center.

 

However, their plans have been hampered by processors and traders who are still cautious about the outlook for local feed consumption.

 

In Jilin, China's largest corn-producing province, the price of average quality corn fell about RMB20 to around RMB1,140-RMB1,180 a tonne.

 

Meanwhile, prices in Guangdong province, a major consumption area in the south, were RMB10 lower at around RMB1,370 a tonne.

 

Although local traders had expected feed consumption in Guangdong to rise quickly with the easing of the bird flu situation and after the province had resumed poultry supplies to Hong Kong, the increase was not substantial enough to boost demand.

 

"Feed consumption didn't pick up as quickly as some traders expected," said Wang.

 

As arrivals at the port increased, prices were pressured.

 

The average price in Dalian, a major port in northeastern Shandong province where corn is transported from the north to the south, fell RMB10-RMB20 to around RMB1,270-RMB1,280 a tonne.

 

As farmers are said to only be holding 30 percent of their total stocks while traders and processors are maintaining low stock levels, corn prices are likely to pick up in one or two months, if feed demand rises at that time, said analysts.